Trade adventure taxability depends on proof of trading transactions, not mere habitual property dealings.

Income of a wife from a money-lending business was held includible in the assessee's assessment, while income from agricultural lands was treated as not taxable as business income. Profit on sale of the Kandal and Bishopdown properties was not brought to tax as income from trade or an adventure in the nature of trade, because habitual buying and selling alone was insufficient; the transactions had to be shown on the relevant material to be trading transactions. The reference was answered partly against the assessee and partly in his favour, with no tax liability on the disputed property-sale profit.

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Issues: (i) Whether the income of the assessee's wife from her money-lending business was includible in the assessee's assessment; (ii) whether the income from agricultural lands was taxable as business income; and (iii) whether the profit on sale of the Kandal and Bishopdown properties was taxable as income from trade or an adventure in the nature of trade.

Issue (i): Whether the income of the assessee's wife from her money-lending business was includible in the assessee's assessment.

Analysis: The issue was treated as governed by the answer already given in the connected tax case and was not independently re-examined on separate reasoning in this reference.

Conclusion: The answer was against the assessee.

Issue (ii): Whether the income from agricultural lands was taxable as business income.

Analysis: The issue was similarly covered by the answer in the connected tax case and did not call for separate independent discussion in this reference.

Conclusion: The answer was in favour of the assessee.

Issue (iii): Whether the profit on sale of the Kandal and Bishopdown properties was taxable as income from trade or an adventure in the nature of trade.

Analysis: Taxability depended on whether the purchases and sales were in the course of a trade or constituted an adventure in the nature of trade. Mere habitual buying and selling of properties was held to be insufficient by itself, and the Tribunal's finding rested on an inadequate approach without the necessary finding that the transactions were trading transactions or trading adventures.

Conclusion: The answer was in favour of the assessee.

Final Conclusion: The reference was answered partly against the assessee on the first issue and in the assessee's favour on the remaining issues, so no tax liability attached to the disputed property-sale profit.

Ratio Decidendi: Habitual dealing by itself does not establish trade or an adventure in the nature of trade; taxability arises only when the transactions are shown to be trading transactions on the relevant material.

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